UK’s New Aid Plan: to Increase Employment and Trade for World’s Poorest

A boy runs by a classroom with bags of food aid at a school in the village of Malikopo, which lies in one of the areas most affected by drought, on September 9, 2016 in Chikwawa, Malawi. Drought associated with the El Nino weather pattern has created famine throughout Southern Africa with over 60 million people dependent on food aid. (Photo by Andrew Renneisen/Getty Images)

London- Majalla

Britain vowed on Tuesday to focus its aid budget on economic development in the world’s poorest countries in a bid to create jobs and help it foster future trading partners as it prepares to leave the European Union.

In its first economic development strategy, the Department for International Development (DFID) said it would use its 12 billion pound ($15 billion) budget to support countries to mobilise their domestic resources and reduce their reliance on foreign aid.

The strategy will help boost global prosperity and address some of the root causes of mass migration and global instability, the department said.

As more than a billion young people will need jobs over the next decade, mainly in Asia and Africa, focusing aid on economic development will help the poorest countries stand on their own two feet, International Development Secretary Priti Patel said.

“Failure will consign a generation to a future where jobs and opportunity are out of reach, potentially fuelling instability and mass migration with direct consequences for Britain,” Patel said in a statement.

According to Reuters news agency, the department has been criticised since Patel took up her post last July for moving towards an “aid for trade” approach.
But DFID said the strategy builds on Britain’s existing work to drive economic development, which it said had helped almost 70 million people access financial services and improved access to clean energy for more than six million.

Recent examples include Britain’s support for a plan to give Ethiopia, which hosts around 750,000 refugees – the largest number in Africa – 80 million pounds ($100 million) to create 100,000 jobs. Up to a third will be available to refugees.

British lawmakers approved controversial plans this month to increase the amount of aid that can be channelled through CDC, DFID’s private equity arm, to 6 billion pounds from 1.5 billion.
CDC has come under fire by the National Audit Office, a government watchdog, for its lack of transparency and an investment focus favouring wealthier countries at the expense of poorer ones.
DFID said CDC’s investments had created more than one million jobs in Africa and South Asia in 2015, with investee companies paying more than $2.6 billion in local taxes.

Anti-poverty campaign group ONE said helping poor countries develop into prosperous nations with which Britain can trade in the future was a sensible goal that could help end poverty, provided DFID prioritised the most fragile states.

“In order to leverage the kind of finance needed for such challenging environments, we need development finance institutions, such as the CDC, to prioritise fragile and unstable countries which are too challenging for other investors,” Saira O’Mallie, ONE’s UK director, said in a statement.